automatically position text box in matplotlib

Just use annotate and specify axis coordinates. For example, "upper left" would be:

plt.annotate('Something', xy=(0.05, 0.95), xycoords='axes fraction')

You could also get fancier and specify a constant offset in points:

plt.annotate('Something', xy=(0, 1), xytext=(12, -12), va='top'
             xycoords='axes fraction', textcoords='offset points')

For more explanation see the examples here and the more detailed examples here.

I'm not sure if this was available when I originally posted the question but using the loc parameter can now actually be used. Below is an example:

import numpy as np
import matplotlib.pyplot as plt
from matplotlib.offsetbox import AnchoredText

# make some data
x = np.arange(10)
y = x

# set up figure and axes
f, ax = plt.subplots(1,1)

# loc works the same as it does with figures (though best doesn't work)
# pad=5 will increase the size of padding between the border and text
# borderpad=5 will increase the distance between the border and the axes
# frameon=False will remove the box around the text

anchored_text = AnchoredText("Test", loc=2)
ax.plot(x,y)
ax.add_artist(anchored_text)

plt.show()

The question is quite old but as there is no general solution to the problem till now (2019) according to Add loc=best kwarg to pyplot.text(), I'm using legend() and the following workaround to obtain auto-placement for simple text boxes:

import numpy as np
import matplotlib.pyplot as plt
import matplotlib.patches as mpl_patches

x = np.linspace(-1,1)
fig, ax = plt.subplots()
ax.plot(x, x*x)

# create a list with two empty handles (or more if needed)
handles = [mpl_patches.Rectangle((0, 0), 1, 1, fc="white", ec="white", 
                                 lw=0, alpha=0)] * 2

# create the corresponding number of labels (= the text you want to display)
labels = []
labels.append("pi = {0:.4g}".format(np.pi))
labels.append("root(2) = {0:.4g}".format(np.sqrt(2)))

# create the legend, supressing the blank space of the empty line symbol and the
# padding between symbol and label by setting handlelenght and handletextpad
ax.legend(handles, labels, loc='best', fontsize='small', 
          fancybox=True, framealpha=0.7, 
          handlelength=0, handletextpad=0)
plt.show()

The general idea is to create a legend with a blank line symbol and to remove the resulting empty space afterwards. How to adjust the size of matplotlib legend box? helped me with the legend formatting.